The years ahead will be remembered as the Decade of Asia and Asean, with many exciting developments in this part of the world to attract investment and lead to another economic boom.
Not many people realise this yet, but Southeast Asia will enter a new investment cycle. The impetus will come from various directions, including the upcoming Asean Economic Community (AEC), free trade agreements with major trading partners such as China and India, the opening up of Myanmar, and new infrastructure being built such as dams, road networks, railways, electricity grids and gas pipelines.
This investment cycle will last for some time. During this period there will be intense competition to invest in Southeast Asia, with China, India, Japan, the US and Europe all strategically jockeying for position _ as well as investment from Asean countries themselves, including Thailand.
Thailand’s role in this boom will be both as an investor and an investment destination. Thailand has the largest number of multinational corporations among Asean countries, ahead of Malaysia and Indonesia, as our major companies _ such as PTT, Siam Cement, CP Group and its flagship Charoen Pokphand Foods, Thai Summit, Banpu, Mitr Phol, Thai Union Frozen Products, Central Group, Italian-Thai and many more _ have already established substantial beachheads offshore.
Smaller Thai companies are now studying the markets in preparation for making their own moves in the region. For example, a recent survey of the Thai shoe industry found that 100 companies were planning to relocate to neighbouring countries within the next 10 years to take advantage of their low labour costs.
The prospects for Thai companies investing in Southeast Asia are excellent. Thailand’s economic development is about 10-20 years ahead of many of its Asean co-members, so Thai companies already have comparatively sophisticated technology and production systems. This gives them a competitive advantage compared with the local companies in other countries, plus they already have better local knowledge and connections than investors from Europe and the US.
As the geographic hub of Asean, Thailand is also a very attractive investment destination, ranking 11th in the latest Unctad World Investment Prospect Survey and 17th in the World Bank Ease of Doing Business Survey. Its other advantages include established industry clusters, a highly skilled workforce, a favourable investment regime and excellent infrastructure.
Despite our difficulties with the floods last year, a large amount of money and investment will be coming into Thailand, due to the new wave of government infrastructure investment and exciting opportunities in the region. New technology will also enter and, once the projects are complete, add to our comparative advantage.
In these troubled times for the global economy _ with Europe’s difficulties deepening and the US recovery still struggling along _ eyes are increasingly turning to this part of the world. It is very reassuring for investors that in Asean we have healthy balance sheets. Our banks, corporations, government and households in general have comparatively low debt.
It is difficult to think of any other part of the world that has such favourable conditions. And Thailand and Thai companies are indeed fortunate to be well situated so close to the action and to be able to participate in this coming decade of Asia and Asean. –Bangkok Post
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c/o National Trade Union Center Philippines
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